Hiring, Budget Concerns Top Of Mind For IT Leaders In 2016
An annual survey of IT leaders, including CIOs, vice presidents, directors, and hiring managers, reveals some of the biggest trends and challenges they expect to face in 2016.
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The 2016 Annual IT Forecast from IT staffing firm TEKsystems released earlier this month shows a mixed bag of good news and bad news for IT leaders, including CIOs, vice presidents, directors, and hiring managers. The good news: They feel fairly confident that they can meet business needs, and they're looking to add talent to their organizations. The bad news: They're losing more control of tech spending, and they're worried about meeting the challenges of new projects.
TEKsystems, which has released its forecast for the past four years, surveys IT leaders on major topics affecting their departments and their role as leaders. This year, the company polled more than 500 IT leaders in the US and Canada in multiple industries at companies ranging in size from less than $50 million to more than $10 billion in annual revenue.
The respondents, which included CIOs, vice presidents, directors, and hiring managers, were polled in Oct. 2015 via an online survey. Each of the past four studies included a different random sampling of leaders from the TEKsystems database. While there may have been some overlap, the studies did not survey the exact same group each year.
Still, by asking similar questions every year, TEKsystems can offer a long view of the attitudes and challenges of IT leaders and new trends these CIOs, vice presidents, directors, and hiring managers need to worry about in the near future. For the latest study, respondents were asked about their biggest challenges, budgets, and priorities for 2016. They were also asked about talent acquisition and hiring outlooks.
Take a look at 10 insights from this latest report to see the priorities and challenges IT leaders are anticipating for the coming year and then share your impressions in the comments.
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When asked if they were confident that they could meet overall organizational demands, IT leaders who took part in the survey had less confidence than the year before -- for the first time in four years. Only 68%, versus 71% last year, had confidence that they could meet organizational demands. TEKsystems Research Manager Jason Hayman said in a phone interview that he believes this might be a sign of decreased confidence among IT leaders and their relation to the larger organization. "The (three-percentage point) drop in overall confidence is nothing to be alarmed at," Hayman said, "It is one you'd highlight with an asterisk.
While the slight drop may not be statistically significant by itself, if you pair it with the next insight, it just might be a sign of difficult times to come.
Only 54% of IT leaders surveyed said they had confidence in new initiatives, while 75% said they were confident that they could keep up with core IT demands. Hayman said that this is the first time TEKsystems segmented this question, "and only about half of CIOs were confident in new initiatives. This is not doom or gloom, but it might be important to show how CIOs are struggling with organizational alignment which is the top challenge listed by CIOs."
Hayman went on to say that when you combine it with the next insight -- that IT is losing control of the technology budget -- it might be that IT leaders surveyed are being left out of the critical new decisions their companies are making, and that is affecting their confidence and ability to perform.
Perhaps the most startling revelation from this most recent report is that only 42% of survey respondents think IT will be the department in their organization that spends the most on technology in 2016. That means the other 58% of respondents said they are expecting other areas to spend the most in technology in the coming year. (Some 27% said it would be marketing/sales, 18% said operations, 6% said finance/accounting, 4% said human resources/legal, 1% said customer service, and 2% said "other.")
Hayman said this shows the ubiquity and easy access of technology due to growth in the cloud and x-as-a-service. "[What other departments are spending on] ranges from large CRM projects to small, specific applications in departments," Hayman said, "As an example, we see marketing spending money on UI and UX experts and other people who are directly responsible for the customer experience. Big data is another example where different departments go out on their own. IT is too slow, so other departments are going to big data vendors."
Hayman cautioned that there is a potential problem with CIOs allowing this trend to continue. "The real challenge comes up when all these apps are sourced by different departments and don't talk to each other, and they need to be integrated. IT has to come in and clean everything up to prevent the silos."
With the IT leaders surveyed acknowledging that they are no longer the sole gate-keepers for technology, it shouldn't be surprising that they also said their biggest challenges are around organizational alignment and governance. Thirty-two percent said organizational alignment (which is defined as shared knowledge, understanding goals, and the ability to interact and communicate) was their biggest challenge in the new year. Twenty-one percent said governance, which is defined as IT alignment with business strategy and appropriate resource allocation, was their biggest issue. Acquiring the right skills and talent rounded out the top three, with 20% of IT leaders surveyed saying it was their biggest challenge in 2016.
When asked to identify the trend or technology that would have the biggest impact on their organization, the IT leaders responding to the survey identified security as the biggest impact for the second year in a row. Rounding out the top five were business intelligence/big data, networking, cloud, and mobility. This is essentially the same top five as the 2015 forecast, except that networking was not offered as an option in previous surveys. ERP was in the top five in the 2015 forecast, instead of networking, and fell to number eight in the 2016 report.
Not surprisingly then, when IT leaders surveyed were asked to name areas of their budget most likely to see increases, 66% asked said security. Fifty-one percent of respondents expects to see increases in budget for mobility. Forty-eight said they expect to spend more on cloud.
If you're looking to get hired in 2016, the survey results have good news for you. Of those IT leaders surveyed, 43% said they plan to increase their full-time staff in 2016. This is up slightly from 40% in the 2015 forecast. Also, 41% said they plan on adding to their contingent staff this coming year, which is up from 36% in the 2015 forecast. Only 10% of IT leaders surveyed thought they might have to reduce full-time staff.
With all the hiring plans coupled with low unemployment in IT, you might expect salaries to rise quite a lot. But according to the survey, that may not be the case. Of the IT leaders surveyed, 69% said they expect salaries to go up no more than 5% with only 4% saying raises would be any higher. Twenty-three percent said they expect salaries to be flat and a depressing 4% expect salaries to drop up to 5%.
With talent shortages as a major CIO problem, how is it possible that salaries aren't increasing faster? Hayman says he thinks it is about a disconnect between HR and what other budget decision makers think about the market and how hard it actually is to find top talent. "What we come across every day is a lack of understanding or acknowledgment of just how critical some of the labor supply shortages are in IT," Hayman said.
"What we find is that line managers are given a budget for a hire and the managers know that the number they are given is crazy in the current market, but this is what they are given by HR. There is a lack of knowledge or education about what these people should be paid. Even with the CIO, they are often a decade removed from what they made when they were in similar positions."
For the fourth year running, IT leaders surveyed said that programmers and developers were the hardest jobs to fill with exceptional talent. Security professionals moved from No. 4 in the 2015 report to No. 2 on the 2016 list. Software engineers were No. 3 (No. 2 in 2015) on the list. A first-time addition to the survey, database administrators came in No. 4 on the 2016 list, and 2015's fourth place finisher, project managers, is No. 5 on the 2016 list.
What explains the rise of security professionals this year? Hayman said, "We saw security lower the past few years, and we thought it was curious that it was so low. I think in enterprises, security was often thought of as just sort of there and it wasn't thought of until the next big breach was in the news. Now, with increased risk, [...] compliance issues, and global trends like terrorism, security is finally staying top of mind."
What do you think of the trends and challenges the IT leaders surveyed said they are going to face in 2016? Do they match the challenges and trends you are facing? Did anything surprise you? Do you feel better knowing what your peers are thinking? Tell us in the comments.
What do you think of the trends and challenges the IT leaders surveyed said they are going to face in 2016? Do they match the challenges and trends you are facing? Did anything surprise you? Do you feel better knowing what your peers are thinking? Tell us in the comments.
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